Dedicated to Deposits: Deals, Data, and Discussion

4.25% 8-Month and 12-Month Online CDs at WaMu

POSTED ON BY

Update 9/26/08: WaMu closed. JPMorgan Chase acquires WaMu's banking operations. Please refer to this post for more details.

Update 8/7/08: The 12-month CD yield has been increased to 4.50% APY. Refer to this post fore more details.

Washington Mutual just recently increased the yield on some of its Online CDs. They now have an 8-month and a 12-month CD with a yield of 4.25% APY. The minimum deposit is $1,000.

The competition is heating up. Yesterday, Bank of America and Countrywide Bank came out with a 4.10% APY 7-month CD (see post). And Wachovia extended its high yield Featured CDs for another few weeks (see post). To see how competitive these rates are, refer to Bankrate's 6-month CD page. The top CD on the list only has a yield of 3.72% APY as of 7/19/08. The 9-month CD list isn't much better. The top yield is only 3.80%.

For details about opening and closing WaMu CDs and details about WaMu's checking and savings accounts, please refer to this July 5th post.

WaMu also has some competitive long-term CD rates, but these are only available as Traditional CDs. As of today, these include a 5% APY for terms from 48 to 120 months. I'm not sure why they don't also offer these as Online CDs. For more details about these Traditional CDs, please refer to this post.

Latest WaMu News

WaMu has been hit hard by the crisis in the mortgage and credit markets. It's scheduled to release its second-quarter financial report on Tuesday. As this Seattle Times article reports, WaMu raised $7.2 billion in new capital 3 months ago which was needed to help cover the cost of bad mortgage loans. Investors will be watching Tuesday's release closely to see if WaMu's condition has worsened.

As I recommend with any bank, make sure you stay under the FDIC limits. WaMu is FDIC insured under two banks (Washington Mutual Bank FSB and Washington Mutual Bank).

Thanks to the reader jagermeister who mentioned this new CD rates in the comments. If you find any good deals, please leave a comment in the finding the best deals post (the red link to this post is located on the top right).

Update: Added info on the 5% Traditional CDs.

  Tags: CD rates

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Comments
30 Comments.
Comment #1 by Anonymous posted on
Anonymous
Under the "Details" tab, WaMu says this CD requires free online banking. Is this a separate checking account that I need to open, or is this just an online portal to your CD?

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Comment #2 by david (anonymous) posted on
david
Could you explain what it means for WAMU to have two separate FDIC certificates, under two different names? Does this mean I can open a 100,000 CD at one institution and another 100,000 CD at the other institution and have them both be fully FDIC insured?

1
Comment #3 by Anonymous posted on
Anonymous
David,

Wamu purchased, some times back, Great Western Bank and assumed their FDIC insurance certificate. Some old clients have CDs rolled over and over and some old accounts that are issued way back, are insured under the old FDIC certificate.

Don't fall for dual FDIC trap. You can only be insured up to $100K per person at any one Bank.

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Comment #4 by Anonymous posted on
Anonymous
To Anonymous 7:56am:
By online banking, they mean signing up to manage your accounts (watch your CD grow) online. However, their free checking account is useful because then you can get their Online Savings Account which presently pays 3.3% APY (and has been higher).

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Comment #5 by Anonymous posted on
Anonymous
I didn't see it mentioned: does this require new money? Or can I fund it from my existing checking or savings account?

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Comment #6 by Anonymous posted on
Anonymous
With all this rate competition, I opened a Countrywide 4.10% 7 month CD since I had funds in Savingslink already and it was easy to open.

WaMU's 8 month CD is tops now but I don't trust WaMU and I get 1 month less of a lock in anyways.

.15% on large balances does add up though. As for now Countrywide is getting my funds since its local, convenient and easy to move funds and I have had no problems since I have dealt with them.

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Comment #7 by tuphat (anonymous) posted on
tuphat
@8:31 -- Would you agree that Countrywide Bank FSB and Bank of America NA are two separate banks for FDIC purposes?

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Comment #8 by Triple Jaygh and the Devil (anonymous) posted on
Triple Jaygh and the Devil
To Anonymous at 8:31 a.m.:

You are absolutely wrong when you said "don't fall into the FDIC trap" concerning a bank having two FDIC charters.

I had two separate accounts at World Savings (before Wachovia swallowed it up). World had two charters, each with a separate name in the title. Both accounts had separate FDIC insurance, confirmed by both World Savings and the FDIC. World would advertise this extra feature to get more money.

If a bank has two, they might call themselves, as an example: World Savings Bank National Associate and World Savings Bank of Texas.

It is not an FDIC trap if the bank indeed has two separate titles and charters, and you make sure your accounts are placed in both.

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Comment #9 by Anonymous posted on
Anonymous
Are these banks positioning ahead of upcoming Fed rate hikes or trying to stay competitive? Interesting that bank cd rates are suddenly rising in synch with all the chatter out there about Fed moving sooner than later on rate hikes. I wonder if they will go even higher shortly. Hope so since my CDs with Countrywide all mature in 3 weeks.

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Comment #10 by Anonymous posted on
Anonymous
I don't think rates will rise except for these cd's right now.

I'll just leave funds at Countrywide since its local and convenient and right on the corner. With WaMU its a further walk and could be a hassle as Ive had issues in the past.

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Comment #11 by Anonymous posted on
Anonymous
Good deal! I needed a CD maturing in March. Logged in, opened the CD, transferred $$ from my WaMu Online Savings account, and the new CD showed up immediately in my account list.

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Comment #12 by Anonymous posted on
Anonymous
I would have taken the 4.25% 8 month if it was at a bank other than WaMU.

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Comment #13 by ShraZZy (anonymous) posted on
ShraZZy
you don't need new funds, just use what you have in your Checking or Savings account at WAMU. Easy to open & close CDs.

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Comment #14 by emk (anonymous) posted on
emk
Have accounts with several banks, I can vouch that Wamu has the one of the best rates and easiest interface to open an online CD and saving. Kinda ****ed as I just opened a CD last week for 4.00 apy, but I'm gonna jump on this one as well. Just make sure u stay under FDIC limits

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Comment #15 by Anonymous posted on
Anonymous
To all you who think that you can get more then $100K per single account at WaMu, go here and read it for yourself:

http://www.wamu.com/customer_service/questions_answers/faq/personal/personal_savings/certificate_of_deposit/SC2T3Q15.htm

$100K is limit, no matter how many FDIC certificates a Bank holds. Only the first $100K counts unless is an IRA.

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Comment #16 by Anonymous posted on
Anonymous
To 10:14 AM, you are comparing apples and oranges.
Great western Bank does not exists, only the FDIC certificate has been assumed and used on the old, still existing accounts at WaMu.

WaMu insures only to $100K per single account and $250K for IRA only.

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Comment #17 by bob (anonymous) posted on
bob
Just opened a CD online.

Well, not really. I APPLIED.

Despite 5 Lexus Nexus type verification questions, they are still going to wait for me to report back with 2 small deposit amounts. Then, they are going to suck those amounts back out. They tell me this AFTERWARDS which might put me over my withdrawl limit at GMAC.

They didnt ask for POD info and there was no place to enter it.

They also didnt ask what I wanted when the CD expired.

After 15 minutes on hold at their 800#. I gave up. Their customer service appears as bad as Wachovia which I decided to avoid for that very reason.

Still no email from them. But I saved the info below....
=======================
You've selected to setup a new external account from your other financial institution. Please follow these instructions as soon as possible. (Keep in mind that you can submit the opening deposit for your new account by any method you choose).

To complete your application, you MUST follow the steps described below within the next 30 days to verify the external account. Otherwise, your account will be closed.

In 2-3 business days, WaMu will make two small deposits and equivalent withdrawals (each less than $1.00) in the external account you specified:

Go to your other bank's Web site* and review the external account you've specified. Find the two small deposits from Washington Mutual and write down the amounts.
Go to the wamu.com home page and log in to your new account. Click on "Verify funding for this new account".
You will be asked to enter the two amounts correctly to confirm your external account.

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Comment #18 by Anonymous posted on
Anonymous
Bob, the instructions you received sound like the standard ones for establishing ACH transfers. If it matters, I believe other posters here have commented on WAMU's slow turnaround for such transfers, once your account is established for them.

Your observation on lack of intake for POD info concerns me. I specifically asked my rep at local WAMU bank about this and he claimed such designations were possible online.

I also inquired about penalty for early withdrawal on 8 month CD and he gave me a complicated formula where the penalty would vary based on time of withdrawal. According to him, the earlier the withdrawal, the higher the penalty, which sounds very unlike the norm. Can anyone confirm that this is the case and not something more straightforward like, say, 3 months interest?

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Comment #19 by Anonymous posted on
Anonymous
Another observation is that WAMU generally accepts additional deposits into the original CD up to the original amount. In other words, open a CD for $10K and 4 months down the road, add to the CD and maintain the same rate.

I don't believe that Wachovia or CountryWide offer this add on feature.

Check the details for these features.

JAC

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Comment #20 by Banking Guy (anonymous) posted on
Banking Guy
About the early withdrawal penalty, I can confirm that they have a convoluted formula. In a past post I had a link to WaMu's terms and conditions document which included this, but the link is no longer active and I can't find where at wamu.com it's now located. I'll keep looking.

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Comment #21 by Anonymous posted on
Anonymous
Banking Guy, thanks for responding to my question on early withdrawal penalty. Oddly, according to terms sheet I received for CD opened earlier in the year, "The EWP will be equal to 90 days for terms less than 12 months and 180 days for terms of 12 months of simple interest on the amount withdrawn at the rate then paid on the account."

I'm awaiting additional clarification from WaMu. If you find anything, please do holler. Meanwhile, I'm seriously tempted to open CD with Countrywide instead. At least terms on EWP are clear at Countrywide. Thanks again for all your help.

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Comment #22 by bob (anonymous) posted on
bob
I still havent gotten an email from them but I checked my GMAC account and found the 2 small deposits and 1 withdrawl for the sum of the deposits. They didnt tell me ahead of time they were going to do this or I might of funded it from a different account.

And of course, the account I initiated early monday wont really be earning interest untill wed.

I didnt check the box saying it was ok for their spam so they apparently wont send me ANY info regarding my account. If I hadnt of checked my gmac account, I wouldnt have known the trial deposits were there.

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Comment #23 by Anonymous posted on
Anonymous
I just opened a 8 months online CD. It takes less than 5 mins to open and funded from my online saving. The T&C on my CD regarding EWP is as follows:

"If principal from any Online CD is withdrawn before the maturity date, the CD Early Withdrawal Penalty (EWP) will
be calculated at the rate then paid on the CD on the amount withdrawn based on the full (rather than remaining) current
term of the CD as follows: CDs with a term of less than 12 months – an EWP equal to 90 days of simple interest
(whether interest has been earned or not) ; CDs with a term of 12 to less than 36 months – an EWP equal to 180 days of
simple interest (whether interest has been earned or not) ; CDs with a term of 36 months or more – an EWP equal to
365 days of simple interest (whether interest has been earned or not) ."

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Comment #24 by Anonymous posted on
Anonymous
Anonymous at 1:12 PM, Thanks for clarification and confirmation on EWP.

I finally heard back from WaMu rep confirming same, this after more than half dozen e-mails yesterday discussing the convoluted formula he initially put forth, and sans apology for confusion. I decided to open Countrywide CD instead.

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Comment #25 by bob (anonymous) posted on
bob
These folks are pretty incompetent.

My account is STILL not funded. They STILL havent sent me an email and responses to 3 bankmails have been canned BS responses that they cant do anything unless I call.

Ive been there, done that., not doing it again.


Is there anyway I can get GMAC to not pay the CD if they ever decide to fund it ?

Id rather not do business with incompetent banks with BAD customer service.

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Comment #26 by Anonymous posted on
Anonymous
I opened an online CD in 5 minutes transferring the money from my WaMu checking account which I had just transferred from an external account. All my transactions and external transfers with WaMu online have been fine except that the outgoing transfers seem to take much longer than the incoming ones. Bob may be having problems because he possibly put in the wrong account numbers.

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Comment #27 by Vadim (anonymous) posted on
Vadim
Has anyone gotten WAMU to properly title a POD account?

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Comment #28 by Anonymous posted on
Anonymous
I was not able to open this CD on line, because I am an existing WaMu customer (have mortgage with them), and already have existing links to other financials institutions (2 CU). I was planning to fund it with check from Huntington bank by just simply bringing it to the bank. It did not give me this option while I was trying to set it up on line. Now it is a pain in the neck: opened checking/saving, brought them check, waiting for check to clear, and THEN will open CD. Customer service is horrible, gave all kinds of wrong advice down the way.

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Comment #29 by Anonymous posted on
Anonymous
WaMu customer service is the most incompetent, slow and outright inept one that I have ever experienced in a financial institution.

The two WaMu online CDs I opened early this year are just maturing and I can't wait to transfer the funds out of there.

For those who are considering opeing a WaMu account: take your deposits somewhere else; it's not worth the trouble dealing with them, especially given the high risk of failure.

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Comment #30 by JG (anonymous) posted on
JG
Does anyone know if they pull hard credit for a new to WaMu customer?

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